Marketing strategy of banks
One of the major marketing strategy of banks is to show lower Home Loan interest rates than the prevailing interest rates to attract borrowers to the banks. As you know a home loan is a Major financial commitment for us and it can continue with us for more than 10 years. With every bank of competing each other to add more customers, it is very important for you to understand about it. You should have clear decisions on repayment capacity that type of loan and the rates involved this loan. Selecting the right tenure/duration is a major factor that you should decide before approaching the bank.
If you are taking a loan of rupees 30 lakhs which an interest rate of 11 percentage and with a repayment duration of six years, then year net monthly repayment will come around rupees 57,600. If you had chosen it tenure of 20 years, with the same interest rate of 11 percentage the EMI will get reduced to rupees 31,000.
Home Loan Tenure - Opt for a short tenure
It can be better to opt for a short tenure and pay of the commitment towards the home loan as fast as possible but when the tenure is shorter the EMI and goes higher. Many of the borrowers are not able to set aside with such huge amounts to the loan repayment as there may be other commitments also. Short tenure home loans is best for those who can afford a highly repayments towards the home loans. Everyone dreams of a day when his home loan is fully paid and the home becomes completely under his name, without any attachments.
It is always better
If you want to free of the burden of home loan it is always better to go for a short tenure one. Those who cannot afford to set aside the amounts every month to home loan go for a long duration home loan. Select a tenure with no prepayment penalty option. It will ensure that you won’t penalise if you prepay the loan.
Recommended Read :
- Are You Eligible for Home Loan
- How to Apply for a Home Loan?
- Features and Advantages of Taking Home Loan
- Fixed Or Floating Home Loan Which One is Better
- Home Loan Pros and Cons Benefits Risks of House Loan
- Home Loan Terms in India
- How to Apply Home Loan Online?
- Who Can Apply for a Home Loan?
- Home Loan for NRI How to Apply
- How to Get a Home Loan With Low Income?
- How to Get a Home Loan Without Downpayment?
- How to Get Home Loan With Bad Credit?
- What is a Joint Home Loan How Does it Work?
- What are The Benefits of Joint Home Loan?
- How to Reduce Home Loan Emis Methods to Lower Your Emi?
- Tips to Increase Your Home Loan Eligibility
- Why Cant I Get a Home Loan House Loan Not Approved?
- How to Get a Loan for Home Renovation?
- What is Home Extension Loan?
- What is a Home Conversion Loan?
- What is a Home Construction Loan How to Apply for It?
- How to Decide On Your Home Loan Tenure?
- Things to Know Before Balance Transfer of Home Loan
- Home Loan Scams Dangers Risks Bribing Middleman
I agree. It is important to have a detailed information on the loan duration and related aspects. The external information doesnt account for the hidden charges which might shoot up the overall costs. The intense competitive environment of loan market makes the picture more attractive which might not account for certain information which is essential in the long run
Taking a home loan to buy your dream house is a very big financial commitment. Your home loan repayment tenure should be entirely based on your monthly income. The EMI should be such, that it will not exhaust all your monthly income. It is always advisable to consult a professional before finalizing on the tenure and the EMI amount. Taking a short or long tterm EMI entirely depends on the individual’s earning capacity. A careful study of interest rates is very essential.